Arizona Utility Blinks in Bitter Battle Over Rooftop Solar

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Photo: iStockPhoto
Smooth finish, but will these panels undermine traditional utilities?

Arizona’s biggest utility, Arizona Public Service, is withdrawing its bid to jack up monthly fees for rooftop solar users in its territory. The retreat, tendered last week to the Arizona Corporation Commission (ACC), capped an eventful month in the high-stakes battle between utilities and solar advocates that's raging across Arizona rooftops. The party with the most bruises is not Arizona Public Service (APS), however, but the ACC itself. The elected body referees the state's power markets, but all five of its commissioners now face accusations of bias that challenge their ability to fairly adjudicate the rooftop solar dispute.

Arizona’s solar dispute is hot, but not unique. Across the United States utilities are fighting to contain or eliminate “net metering” policies that pay rooftop solar users retail prices for the surplus power that their panels export to the grid (thus offsetting retail charges for power they consume at night). Utilities argue that solar customers rely heavily on the grid but, under net metering, pay little or nothing to maintain it. Over the past year all of Arizona’s utilities levied or proposed new fees for customers installing rooftop solar systems. APS’s proposal worked out to about $21 per month.

Solar advocates argue that rooftop solar provides a variety of benefits to the grid—such as reducing consumption of fossil fuels and lessening reliance on distant power plants. They see fees from utilities such as APS, which owns fossil-fueled and nuclear power plants, as unfair competition. 

In August, ACC staff sided with solar advocates’ call to defer consideration of proposed fees so they could be reviewed in the broader context of the utility’s overall business. When the ACC commissioners voted to overrule, calling for immediate hearings on solar fees, San Francisco-based solar installer Sunrun and two former commissioners filed challenges with the ACC, alleging bias

The bias filings allege that the two commissioners elected in 2014 allegedly benefited from $3.2 million in secret campaign donations to independent groups by APS. The filings also cite a third commissioner elected in 2012 for inappropriate public comments about rooftop solar users. (Earlier challenges accuse the remaining two commissioners of bias based on lobbying activities prior to their election in 2012.)

APS presents these attacks as a bid by solar advocates to avoid debating the proposed utility fees on the merits. APS writes:

They have retreated to procedural tactics and character attacks designed to discredit elected officials and undermine the integrity of the Arizona Corporation Commission.The obvious goal is to paralyze the Commission.

However, allegations of improper campaign contributions by APS have been swirling in the Arizona media for over a year. APS acknowledges that it is politically active, and has refused to confirm or deny the allegations. 

Under state law independent groups financing political advertisements in Arizona are not obligated to reveal their donors, so tracking such “dark money” spending is difficult. The Arizona Republic, Phoenix’ leading daily newspaper, reported last month that two commissioners are seeking ACC staff advice as to whether the ACC can compel utilities such as APS to reveal their political contributions

According to the Republic the commissioners elected in 2012 benefited from contributions from the Arizona Chamber of Commerce and Industry, including money from Arizona Public Service. And it writes that the two commissioners elected last year benefited from "independent political campaigns widely believed to be financed with so-called dark-money from APS.” 

In March 2015 an organization tracking campaign finance contributions revealed that a foundation led by a former APS chairman and CEO that is normally dedicated to supporting Arizona State University had inexplicably given $100,000 to a "shadowy" nonprofit called Save Our Future Now. That group spent $2.4 million on TV ads attacking pro-solar ACC candidates in 2014. 

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